LECTURE V. Tax upon travellers. for a long period the right to the privilege might be lost. But this construction will be taken strictly against the grantee. The power of taxation is an attribute of sovereignty and is essential to every independent government. The whole community is interested in retaining it undiminished, and has a right to insist that its abandonment ought not to be presumed in a case in which the deliberate purpose of the State to abandon it does not appear. Delaware Railroad Tax, 18 Wall. 206. An illustration of this rule is found in Vicksburg &c. Railroad Co. v. Dennis, 116 U. S. 665, where the road and fixtures of the company, by its charter, were exempt from taxation for ten years after its completion, but this was held not to exempt the road and fixtures from taxation before its completion. To support the exemption, there must be an adequate consideration, otherwise it is a mere spontaneous concession on the part of the legislature, not constituting a contract, and may be revoked at will. Rector of Christ's Church v. County of Philadelphia, 24 How. 300. NOTES UPON LECTURE V. UNDER the head of the power of taxation Mr. Lecture V. Justice Miller groups two distinct subjects in this lecture: (1) The powers confided by the Constitution to the United States; and (2) the powers which that instrument withholds from the States. He has also alluded to (3) cases in which the courts of the United States interfere to compel the imposition of local taxes in the States. The cases under each of these heads are nu merous. For many years scarcely a volume of the reports has been issued which has not contained one or more of them. Little or no good could come from an extended examination of them; indeed such an examination would be impracticable within the limits to which this note is necessarily confined. It will be sufficient to briefly refer to a few of the leading cases, some of which Mr. Justice Miller has not noticed. 1. The Federal Power of Taxation. In an early case the question was raised Federal power of whether Congress had the power to tax the Dis- taxation. trict of Columbia; and it was held that the power to levy and collect taxes, duties, imposts, and excises was coextensive with the territory LECTURE V. Federal power of taxation. of the United States. But, if a public enemy conquers and occupies a portion of the United States, the portion so occupied becomes foreign territory, so far as revenue laws are concerned; and the subsequent restoration of the authority of the United States over it does not change the character of past transactions. On the other hand, the conquest and military occupation of foreign territory by the United States leaves it foreign country for revenue purposes.3 The exercise by Congress during the civil war of its power to impose direct taxes upon real estate within the States did not create a liability, upon the part of the States in which the land was situated, to pay the tax. The power to tax was exercised upon the property of private individuals within the State. In the great taxation during and immediately after the civil war, questions were sometimes raised whether a particular tax was a direct tax or an impost or excise. A succession tax was held to be the latter." The provision that duties, imposts, and excises shall be uniform throughout the United States is complied with if the tax operates with the same effect in all places where the subject of it is found. There is no want of uniformity simply because the thing taxed is not equally distributed in all parts of the United States. 1 Loughborough v. Blake, 5 Wheat. 317. 2 United States v. Rice, 4 Wheat. 246. 3 Fleming v. Page, 9 How. 603. 4 United States v. Louisiana, 123 U. S. 32. 5 Scholey v. Rew, 23 Wall. 331. Head Money Cases, 112 U. S. 580. Federal power of There are some things which are not proper LECTURE V. subjects of Federal taxation, as, for instance, taxation. the revenues of a municipal corporation.1 2. Restraints upon State Taxation. State power of taxation. The State can authorize the taking of indi- Restraints upon vidual property by taxation only for public uses and purposes. Hence it cannot confer upon its municipal corporations power to create debts to be paid by taxation, when the money is to be used for private objects.2 It cannot part with its general power to tax, because that power is essential to the exercise of its sovereignty and the performance of its duties. But it can by contract part with a portion of this sovereign power for a consideration which it accepts as sufficient. When, in incorporating a private corporation, the State exempts the property of the corporation from taxation, or limits the amount of taxation to be imposed upon it, subsequent legislation, imposing a higher rate of taxation than the charter permits, is invalid. But such legislation is looked upon with jealousy, and construed strictly by the courts. The immunity will not be recognized, unless granted in terms too plain to be mistaken. It is a privilege belonging only to the corporation named, and will not pass to its successor, unless 1 United States v. Railroad Company, 17 Wall. 322. 2 Cole v. La Grange, 113 U. S. 1, and cases cited in the opinion. 3 New Orleans v. Houston, 119 U. S. 265. Chicago & Burlington Railroad v. Guffey, 120 U. S. 569; S. C. 122 U. S. 561. LECTURE V. the intent of the statute thereto is clear and express.1 The power of making such a contract is confined to private corporations. The power of taxation on the part of a municipal corporation is not private property, or a vested right of property in its hands. The conferring of such power is an exercise by the Legislature of a public and governmental power, which cannot be imparted in perpetuity, and is always subject to revocation, modification, and control, and is not the subject of contract.2 3 5 Real estate and personal property of the United States situated within the limits of a State; evidences of debt issued by the United States held by a citizen of a State; franchises conferred by Congress upon a corporation created by it, to be exercised within a State; and agencies employed by the United States in carrying into effect the powers vested in it by the Constitution, cannot be subjected to taxation by the States, without the consent of Congress. The State taxation of national banks, too, is con 1 Morgan v. Louisiana, 93 U. S. 217; Wilson v. Gaines, 103 U. S. 417; Louisville & Nashville Railroad v. Palmes, 109 U. S. 244; Memphis & Little Rock Railroad v. Railroad Commissioners, 112 U. S. 609; Pickard v. East Tennessee, Virginia & Georgia Railroad, 130 U. S. 637; Yazoo & Miss. Valley Railroad v. Thomas, 132 U. S. 174. 2 Williamson v. New Jersey, 130 U. S. 189. 8 Van Brocklin v. Tennessee, 117 U. S. 151; Wisconsin Central Railroad v. Price, 133 U. S. 496. 4 Weston v. Charleston, 2 Pet. 449; Bank v. Supervisors, 7 Wall. 26. California v. Central Pacific Railroad Co., 127 U. S. 1. 6 Osborn v. Bank of the United States, 9 Wheat. 738. |